Gen Wait: Millennials Underbanked, Underfunded - Guest Opinion

Who do you love more – the Millennials, the pundits who talk about Millennials, or the credit unions who offer all sorts of products to capture the Millennial demographic?

Let’s start with the Millennials themselves – the most hyped generation of all time. They were first introduced in 1981 as the “Echo Boomers.” They evolved into “Gen Y” – a weird mix of Gen X and Y2K. When the world didn’t end on Jan. 1, 2000, Gen Y became the “Millennial Generation.” It’s more dignified – right? But to credit unions they are becoming known as “Gen Wait.”

This last moniker reflects a dawning realization that the Millennial generation is waiting to do everything that matters to a credit union. Millennials are simply not buying cars or houses. They’re not getting married, having children or planning for retirement. Why? Because college debt, high unemployment or underemployment has crowded everything else out of the typical Millennial’s wallet.

According to demographer Ken Gronbach, the Millennials or Gen Y will need to become far more entrepreneurial or face upwards of 50% unemployment. A startling forecast.

The pundits have made quite a living from scaring credit unions into Millennial-oriented products. Mobile banking, mobile wallets and NFC are all great products. There’s just one problem: The Millennial audience doesn’t have enough disposable income to take that first bite of the credit union’s apple.

All the mobile banking in the world won’t bring a horde of underbanked Millennials to a credit union’s door. And guess what? Not having mobile banking isn’t preventing them from visiting. They simply don’t have the money to get started!

Credit union managers – let’s not all weep at once. The Millennials are missing out big time, too. They have little to no exposure to financial basics – like shared draft accounts, budgeting and nickel-at-a-time savings plans. Case in point – my Millennial son who thought that standing in line to buy money orders was the best way to pay his bills.

What’s the scariest part of the story? Every time I tell it to the parents of a Millennial, they nod their heads and tell me, “Mine, too.”

Given that the last enlightened generation – the Baby Boomers (and the small and over- indulgent Gen X, the group between the Boomers and Y) – whose finances have been challenged by difficult economies and overall poor planning, what hope do we have for the Millennials’ financial future? They will awaken to financial reality later than any generation before them. As a result, they are guaranteed to have even fewer assets saved for retirement when they need them.

All the talk about banking channels ignores one simple fact – the Millennial generation needs credit counseling more than anywhere, anytime banking. They need knowledge. They need tools to model their future. They need advice. They need products that will help them escape their financial black hole. They need ongoing support.

Does your credit union want to attract and retain the Millennial generation? These ideas might be the most effective way to do it.